Category Archives: Silver

A belated happy new year to our fellow taxpayers. While the pages of The Mint have been quiet, The Mint himself has been pressing forward on a number of initiatives. Perhaps the most notable being our renewed interest in Tax Planning and preparation, which is a natural complement to our virtual CFO and associated services. More to come on that.

Long-suffering readers of The Mint are well aware of our views on monetary theory. Throughout the ages, true money has generally taken the form of gold and/or silver. However, for roughly 44 years now, mankind has been on an extremely dangerous experiment in which debt has come to take the place of money in everyday transactions. While it may seem a completely normal manner of transacting business today, it is lost on most that money and debt are actually polar opposites. They are meant to cancel each other out in trade and, in doing so, maintain the quantity of one another and by extension all of world trade and economic activity, in balance.

However, when money becomes debt, then debt can only be cancelled by the issuance of more debt, which means that the primary impulse of all economic activity is not a well thought out response to the laws of supply and demand, but a response to whether or not the supply of debt instruments in the world is increasing or decreasing.

The period between 2008 and 2013 has been marked by a relative stagnation in what was until then a steady wave of increasing credit post 1971. This stagnation was almost fatal to the debt based monetary system that, by definition, counts on an infinite expansion in the quantity of debt for its very existence.

The current expansion, which began in 2014 and is set to accelerate through 2015 and beyond, is already causing cosmic shifts in the economy. Old, established companies and brands are being supplanted by a phenomenon that is best exemplified by social media platforms: Hyper focused content delivery and a wholesale fragmentation of what were, just five years ago, long-established norms around consumer behavior. Large brands are losing the edge as consumers can increasingly tailor the content that passes by their eyeballs on social media and, further, consume almost any type of media on demand.

This shift is once again propelling a large wave of growth, which means that soon, consumers will begin to demand increasing amounts of credit so that they can underwrite their various individual activities necessitated by this shift.

What place does Silver have in this brave new world? At $16.57 an ounce, physical silver is taking a short breather as the world’s best investment. However, a new form of Silver is rising to take its place.

Digital Silver in the form of unsecured credit at your fingertips

Silver Money Service is a simple mobile app that filters hundreds of credit card offers to help you find unsecured credit that suits your needs. While at first this may seem an elementary concept, the utility of the Silver app, which is currently available for Android and iPhone, cannot be overstated.

As much as we are loath to admit it, most consumers will need to increase their credit footprint over the coming year in order to keep pace with inflation. What the Silver app does is simply save consumers tens if not hundreds of hours sifting through credit card offers in the mail and on the internet. By asking a few simple questions, Silver guides the user to the current credit card offerings that are best suited to their needs.

How does it work? As we mentioned above, the app asks the user a simple, multiple-choice question:

Which type of card are you looking for?

Rewards

Cash back

Low Interest

Bad Credit

From there, it asks the user a second, again multiple choice question based on their response to the first in order to tailor its results to the user’s unique credit needs. The app then presents a list of the relevant credit card offers alongside buttons that allow the user to contact the credit card provider directly via telephone, email, or directly at their website.

Silver’s refreshingly simple and intuitive approach to assisting consumers in expanding their credit footprint. You can download this handy app that the Google Play store and the iPhone App Store today and get a head start on your peers.

While physical silver will always be a safe harbor, the Silver app may prove more useful over the coming years as a way to fund the next wave of credit expansion. Even if you are a gold or silver bug, you can use the Silver app to get a credit card to get ahead of the curve by ordering your next tube of rounds or silver bars from your favorite bullion dealer.

For in the blow off phase, it won’t matter how much unsecured debt one has to pay back, but what real assets one has on hand to confront the gradual disintegration of the real economy.

The liquidity drain initiated by the People’s Bank of China has caused a fire sale on financial assets across the globe as Chinese banks scramble to make various margin calls in the face of double-digit overnight rates. Lee Adler, over at the Wall Street Examiner, offers some insight into the big squeeze currently underway:

For the uninitiated, we beg of you to take a step back and to leave, just for a moment, any thought of “efficient market” hypotheses and market fundamentals behind and see the financial world for what it is: A bunch of corporations with large credit card bills to pay and margin calls to meet.

Like anyone who has a large credit card bill to pay or margin call to meet, the ability to meet the obligation is more often than not determined by the willingness of other large corporations in similar situations to lend them money. If they can, great, the credit rolls over. If not, assets must be liquidated so that the debt can be paid.

The flaw in efficient market theory, with regards to financial markets, is that it implies stability when, in fact, most debtors, especially big ones, only liquidate assets as a final option. As such, this type of liquidation often occurs suddenly and with little warning, hence the feeling of panic and cascading financial markets.

At their core, equity markets represent decisions at the margin. They often reflect this type of liquidation in an exaggerated manner. In an odd way, this sort of whiplash seems to be the only way to spur Central bankers into action.

The actions of the PBoC suggest that they have had enough of the easy money policy that has dominated Central Bank actions for the past five years. They have pulled the plug. Does it have anything to do with Mr. Snowden? Who knows, but it is what it is.

As it stands now, the Federal Reserve and Bank of Japan now stand alone on the mountain of insane monetary policy, watching the smoke plumes rise.

Anyone who has perused The Mint no doubt has noticed that we keep a relatively small collection of coins online. This serves a dual purpose. First, it allows us to quickly grab marketing copy should we have a particular coin in stock. Second, it allows us to savor the coin as we attempt to put its dual faces into words. Normally, this can be a tedious and relatively dull process.

Today was different, as we came across a relatively rare 1 OZ .999 Fine Silver First Anniversary Mount St. Helens Harry Truman Commemorative Round, minted in 1981. For those who are unfamiliar with Harry R. Truman, we offer our marketing copy as a brief descriptor:

On one side of this coin is a bust of Harry R. Truman, the caretaker of the Mount St. Helens Lodge at Spirit Lake who stubbornly refused to leave his home even as the historic eruption was imminent. Truman was 84 when the Mount St. Helens erupted and is presumed to have died along with his 16 cats and 56 others that fateful day on May 18th, 1980. Truman’s bust is surrounded by the inscriptions “Courage,” “Spirit,” “Determination” above and his name, “Harry R. Truman” and the years he was born and died, “1896 – 1980″ below. The letters “KU” appear to the right, their meaning is unknown.

On the other side of this reeded coin is a depiction of Mount St. Helens erupting flanked by the inscriptions “One Troy Ounce” and “.999 Fine Silver,” to indicate its weight and silver content. The top of the coin, just above the smoke plume, is adorned with the inscription “First Anniversary.” Below the mountain are inscribed “1980 – 1981,” and the words “Mount St. Helens.” These beautiful coins are a great way to inspire your friends, loved ones, and co-workers by recalling the finer qualities of a man who became a hero for sticking by his desire to ride out a violent act of nature, come what may.

Mr. Truman, may he rest in peace, in many ways represents the Fed and BoJ today. The other Central Bankers of the world have stepped cautiously back, away from the dreadful inflation for which the eruption of Mount St. Helens will serve as a handy metaphor of today.

Not Mr. Bernanke and his Japanese counterparts. Both the US Dollar and Yen have been on the mountain longer than many of their counterparts, and their current caretakers are convinced that the bubbling inflation that their policies are stoking will simply blow over as they has in the past.

Are they right? Or is it time to move away a safe distance from the mountain?

While the rally in equities continues relatively unchecked, the measure of the M1 monetary base has taken a marked dive of roughly 6.2% since last week, leaving it at a level not seen since April 15th (see the current M1 measure below).

For the uninitiated, the M1 money supply is what we call cash on the street, coins and bills. In other words, what most people consider spending money.

By nature and by the FED’s own admission, money supply data is highly volatile and subject to revision. Even so, our own observation has been that folks are short on cash. While this brief drop is not likely to signal a change in the trend, it has certainly caused some unexpected hiccups in dollar land.

Perhaps not coincidentally, precious metals have continued their near term price collapse. The price of silver, our preferred investment at The Mint, tanked to nearly $20 overnight Sunday. While the near term price is somewhat irrelevant, it may be indicative of a rush to meet short term debt obligations by holders of precious metals.

Most media reports read much into price movements, as if they mean something about the real economy. Unfortunately, the real economy is nothing more than a yo-yo at the end of a string of debt obligations. Until they wind up the yo-yo and let it be, real economic growth (or contraction of that matter), in terms of debt laden USD land, is nothing more than a myth one reads about in text books and in the main stream financial media.

Eventually, the avalanche of FED funds guaranteed as long as their latest QE pledge is in effect will begin to consistently run into real world asset and commodity prices. It will feel good, but participants are advised to keep their eye on the punch bowl. Once it is removed, it will be best to swim near the edge of the pool.

The vanilla crisis is hitting some chocolate patches, try to avoid them.

Like this:

The following is a brief public service announcement from The Mint. Our affiliate, BullionVault.com, is now offering silver bullion purchase and storage services in Singapore. This is great news for a variety of reasons.

First, silver has taken a significant drop in price over the past month. While there is rarely a bad entry point into the precious metals market given that the fundamental debasement of every currency on the planet is ongoing, the past month has offered a unique opportunity to stock up at the lowest prices of the year.

Second, Singapore is one of the safest countries on the planet in terms of banking sector fundamentals, and the country’s competitive advantage is its friendliness to foreign investment and intolerance of corruption. What better place to store your precious metals.

Third, Singapore is outside of the reach of bankrupt western democracies, which makes it unlikely that gold or silver stored there would be confiscated.

Much has occurred since our last correspondence. First, tragically, another act of terrorism has rocked the land of the free. Our thoughts and prayers go out to all affected. Once again, we are reminded of Robert Kennedy’s speech on the menace of violence. For those who have never heard it, it is well worth a listen.

Source IMF via the MoneyGame

Well before the twin blasts interrupted a peaceful Boston afternoon, two of our key indicators and our investment of choice here at The Mint, silver, took an unprecedented bath.

No, the data below on both the Bitcoin and Gold price are not typos. As a Goldman Report put it: “There are weeks when decades happen” or something to that effect, with regards to the action in the gold markets.

Essentially, 500 tonnes of gold were sold in the most recent selloff. Where it will come from or whether or not it will actually be delivered, nobody knows. It is certainly fodder for those who claim these markets are manipulated. Even so, there is no divine law as to what the price of things in US dollars should be. As such, those involved in the trade must accept their random fate, no matter how unjust it feels.

The Bitcoin somehow found its footing around $65 USD after crashing down to the canvas from $260.

However, the amazing, or perhaps not so amazing, if you have read our most recent eBook, part of the story is that it is still trading around $65 USD. This is an amazing commentary on the state of national currencies. How long can the central bank issued national currencies compete when a lifeless logarithm is doing their job better than they ever could?

Bitcoins: What they are and how to use them

We, along with the rest of the Bitcoin community, have been developing some innovative ideas about how to make Bitcoins more accessible to the general public. If you have $150,000 and care to help us launch the initiative more quickly (as an investor, naturally, this is not a charitable endeavor, at least, that is not the intention!) please email us for more information. You could significantly reduce our launch time in what will soon be a highly lucrative and competitive market: Building the Bitcoin infrastructure.

Perhaps our seed capital will come from none other than Zimbabwe. Those who have followed currency matters will recall that just five years ago Zimbabwe gave the world a rare glimpse of hyperinflation and one trillion dollar bill. In the now infamous words of Gideon Gono, Governor of the Reserve Bank of Zimbabwe:

“I’ve been condemned by traditional economists who said that printing money is responsible for inflation. Out of the necessity to exist, to ensure my people survive, I had to find myself printing money. I found myself doing extraordinary things that aren’t in the textbooks. Then the IMF asked the U.S. to please print money. I began to see the whole world now in a mode of practicing what they have been saying I should not. I decided that God had been on my side and had come to vindicate me.”

In a page that has since been removed from CNN’s ireport {SEE UPDATE BELOW}, we saw a rumor that Zimbabwe was poised to adopt the Bitcoin as its official currency. Perhaps Mr. Gono got a hold of our book?

{UPDATE 4/17/2013: The page has been updated and can be seen here. It now appears that Zimbabwe rumor is now official, though unverified by CNN.}

Meanwhile, as Bitcoin, Gold, Silver, and Oil crash, the monetary measures continue to spiral out of control. There are some big naked shorts out there, and Mr. Bernanke may, for a finale as Fed Chairman, borrow a page from Mr. Gono’s playbook circa 2009 in an attempt to cover them. Given the IMF’s global growth forecast, we deem it a virtual certainty.

Like this:

Today’s BLS jobs report was seen as an unmitigated disaster. This should give the Federal Reserve the cover they need to turn Japanese with regards to their QE program (the BOJ came out with a QE program that is roughly 30%! of GDP over a year, by way of comparison, the FED has pumped out 15% of GDP in 5 years).

Bitcoins, gold, and silver jumped. The management of what the world calls currencies is heading for the exits, and from the looks of things, so are many Dollar, Yen, and Euro holders.

Don’t bother to turn off the light or lock the doors, just get the heck out. A four alarm fire coupled with an earthquake is on the verge of breaking out in the currency markets. The monetary premium is looking for something to affix itself to, and it will trample many an asset class in search of it.

At long last, the much anticipated fifth volume in our “Why what we use as Money Matters” series is available in on Amazon’s Kindle and over at Smash words.com for your immediate reading pleasure.

Pacioli’s Gift or Bernanke’s Curse?

The volume has a hero, Luca Pacioli, the Franciscan Monk who not only taught mathematics to Leonardo Da Vinci but dissimenated to Western Civilization nothing short of an economic super power.

It also has a villian, Central Banking, born of the super powers of dual-entry accounting, it uses this super power against humanity and has become dual-entry accounting’s arch nemesis.

How will it end? At this point, you’ll have to shell out $0.99 and a couple hours of your time to find out. However, by doing so, you may end up changing the world for the better. Not a bad return on investment!

We pray you will enjoy it.

Today, Bitcoins traded near $100 USD, silver and gold continued to mysteriously get crushed, and US stocks, perhaps more mysteriously, continued to defy gravity. What does it mean?

The events in Cyprus have once again caused a sort of flight to safety. Unfotunately, the flight to safety is a very crowded trade, and is causing the US Dollar to suffer from an unwelcome bout of strength, or potential deflation.

Bernanke and the Fed will never stand for it. US Dollar strength cannot be tolerated, and will be swiftly dealth with. As it is dealt with in the coming weeks, Bitcoins, gold, and silver will seem like a steal at today’s prices.

Then there is the matter of the brewing war in Persia, but speculation on that scenario must wait, for the Passover is at hand.

Today, we present to you the “postre” of our most recent eBook offering, which we have entitled, after much deliberation,

Pacioli’s Gift or Bernanke’s Curse?

It is slated to arrive on digital shelves this evening. What started as a book about the irony of dual-entry accounting enabling central banking, therefore making man’s greatest wealth producing innovation the agent of his greatest wealth destroying menace.

While it accomplishes this, it naturally spreads its tentacles into sound money, economic thought, and monetary history.

Enjoy desert, the main course will be available shortly.

Conclusion

While free markets and Free Banking represent mankind’s best hope for averting disaster, many people look at the scene on the water bed and side with the 300 pound man, who represents the central bankers of the world. After all, isn’t he the only one taking action to capture and sedate the 800 pound gorilla, whom in our metaphor represents the world’s financial markets?

What this analysis fails to recognize is that the best course of action when dealing with an 800 pound gorilla is to observe it from a distance. Once the gorilla feels like it has an understanding of its surroundings, it will become docile and predictable unless it gets hungry or senses danger. If the gorilla gets hungry, one should let it find something to eat. If it senses danger, one’s reaction should not be to calm the gorilla, rather, to focus on the source of the gorilla’s agitation and act accordingly.

The 800 pound gorilla is not the problem. In fact, it can often be counted on to recognize threats and, even though its reactions may seem unpredictable, gyrations in financial markets serve as early warning signs to potential economic problems on the horizon. Once recognized, economic imbalances can be recognized and remedied.

To silence the gorilla, or the gyrations in the financial markets, is to rob mankind of an important early warning system. Circa 2013, as the efforts of the world’s central bankers to sedate the gorilla by force escalate, many a Chihuahua (our metaphor’s personification of the government) is getting trampled and the water bed of world economic activity is on the verge of springing any number of leaks.

This is an outcome that Luca Pacioli could not have envisioned, for he lived in an age and in a place where Free Banking and free markets were more or less givens. It was an age where capital formation was accelerating and the capital base from which we still operate today was being formed. All thanks to Pacioli’s unwitting effort to disseminate the methods of dual-entry accounting throughout western civilization from his humble Franciscan abode.

While it is a great irony that a Franciscan Monk, sworn to poverty, would refine and articulate the greatest wealth generating innovation known to mankind, it is an even greater irony that this innovation would enable the large-scale employment of man’s greatest threat to this wealth, modern central banking.

The unconventional measures employed by the world’s central bankers in increasing measures over the past 100 and are not only failing to achieve their stated goals of increasing employment and economic growth, they are triggering what is quickly becoming an unmitigated disaster in the fixed income markets. These markets, once the bedrock of global finance, have now been conditioned to do nothing more than attempt to front run the central banks’ interest rate cues up and down the yield curve.

Fortunately, the choice of whether to use Pacioli’s gift for good or for evil is always at hand. Even as the world suffers under the grip of modern central banking, the ultimate solution of Free Banking, the banking that Pacioli and the Venetian merchants had assumed would always exist, is waiting in the wings to save mankind from its own penchant for error. In fact, Free Banking is not something that requires a great deal of compromise and administrative rule writing as most modern legislation does.

Free Banking operates under the rules of natural law, and it can be implemented via a simple political decision to get off of the water bed and leave the gorilla alone.

Unfortunately, it is a political decision that modern governments, whose fate and existence depends upon the modern central banking model, will never take on their own. In the absence of political action, it will take the wholesale collapse of the central bank itself to rid the world of its menace.

It is the catastrophe to come, and it will leave the fortunes of many laid waste as it indiscriminately dismantles the erroneous divisions of labor and implied daily activities that it has caused mankind to organize itself under.

It is not a question of if, but when. For modern central banking will eventually give way to Free Banking out of necessity. When it happens, mankind will be allowed to continue its self-correcting path toward civility and peace.

Today, we offer a second course on the menu of our upcoming eBook release, Pacioli’s Gift vs. Bernanke’s Curse, it is a chapter on the importance of a monetary constant when employing the methods of dual entry accounting. Enjoy!

The Presumption of a Monetary Constant

Luca Pacioli was first and foremost a mathematician. He understood that mathematics relies upon certain constants to remain, well, constant in order for the calculations that depended upon them to be meaningful. Whether or not Pacioli was conscious of the fact, implicit in his presentation of the methods of dual entry accounting is the assumption that the money in which he was directing merchants to keep their accounts on the basis of was sound money. The use of the monetary unit as a unit of account implies that he understood that money was to the economic world what constants were to mathematical calculations.

Also implicit in his assumption was that the monetary units which were to be used as units of account on the accounting ledger contained a constant weight of silver or gold which existed in the natural world. Silver and gold that had been hewn out of the ground and struck into coinage of a set weight and metallic alloy by the men at the old Zecca, the Mint of Venice in the Rialto district which preceded its famous successor was completed in 1545. This was an important assumption, as dual entry accounting only works when the accounts balance. By design, it implies that physical goods are in existence or are reasonably expected to come into existence and become available for exchange.

When Pacioli penned Summa, the Venetian Zecca was one of the largest and most reputable mints in the world. This reputation was born in no small part of a scandal at the Zecca which consummated with the Doges, who ruled Venice at the time issuing a decree on the 11th of November, 1457 against then noted variations in the weight and purity of the gold and silver coins that the Mint at Venice. As a result of this renewed commitment to monetary purity, the coins which circulated in Pacioli’s time and locale, the Silver Ducat, Soldo, Lira Sequin, and Gold Ducat, served as the standard of trade in the world known to Pacioli.

Given that the Venetian merchants could count on this sound monetary standard on which to base their accounts and, by extension, their choice of activities, their use of dual entry accounting not only benefited their own interests, but had the side effect of benefiting all who circulated and traded the Venetian coinage, whether or not they had mastered the art of dual entry accounting.

For those who had mastered the art of dual entry accounting in this environment, the ability to properly recognize and record their transactions and to make sense of the results gave them a sort of super power. This super power, the ability to recognize the value of transactions over longer time horizons and therefore direct investments over longer time horizons, was further refined by Pacioli, who employed the use of Arabic numerals and proposed a system of mercantile accounting that could apply uniformly to all trades and nations.

However, dual entry accounting, as mankind is now coming to understand, is a two-edged sword. For dual entry accounting to work in favor of those who practice and/or rely upon it, the unit of account must hold a stable value. The assumption of the relatively stable value of the monetary unit in relationship to the natural world is essential for interpreting the primary output of dual entry accounting, the profit or loss signal. The stable unit of account is also essential when evaluating the worth and employment of items that are represented by entries to the balance sheet, upon which the profit or loss signal ultimately depends.

In short, the stability of the monetary unit of account was essential if dual entry was to be relied upon for sound decision-making.

For the Venetians, this requirement was met by virtue of their relatively stable monetary unit. As such, the Venetian Mercantile class rose to dominate the Western world. Indeed, with few notable exceptions, dual entry accounting has rendered an invaluable service to mankind and has allowed human progress to follow a generally upward trajectory in terms of material well-being ever since Pacioli made his bequeath to mankind.

As a stable currency enables the super powers of dual entry accounting to operate, an unstable currency, of which there are numerous examples in the largest economies in the world today, circa 2013, is its kryptonite. A currency that does not have a relatively stable value over long time horizons, specifically the time horizons required for large-scale investments of capital to be planned with the precision required for them to be successful, serves to render the gift of Pacioli powerless.

In doing so, an unstable currency threatens to take mankind from the comfort of their large screen televisions, sofas, and smart phones, and throw them back into the dark ages, from which the world that Pacioli lived in had recently emerged.

In the irony of ironies, mankind has unwittingly made use of Pacioli’s gift to create the largest system of unstable currency that the world has ever known, the one that has operated for the past 100 years. This disastrous invention is known as central banking, and it has quickly turned the world’s economy into an unmitigated catastrophe waiting to happen.

The conversion to the Euro, for most practical purposes was a long, drawn out process which took two years to implement, starting with the final exchange rate peg to the Euro and culminating with the coin and bill conversion which Tom so eloquently described.

Adios Euros!

Today, thanks to the prospect of forced bail ins, the term for a levy or tax (depending upon your preferred term for asset confiscation) such as the one proposed in Cyprus which would bail out the government and/or banks, there is a run on banks throughout Iberia.

The reason is that the preference for the bail in solutions are now popping out of central banker’s mouths like pop corn. Even Ben Bernanke, slave master of the US currency, has uttered that it would be a possibility.

However, this is the twenty-first century, and bank runs aren’t what they used to be. For one thing, banks now have instant access to all of the digital currency they could possibly want. It is a simple ledger entry for the bank to replace the customer’s deposit with a Central Bank liability.

However, there is still the matter of cold, hard currency. As the Spaniards begin to withdraw currency en masse, the bank branches are bound to run out of Euros. Thanks to technology, holding Euros, either in physical or digital form, is no longer an absolute necessity and, at this point, it is extremely undesirable.

As the monetary authorities are just now beginning to understand the practical implications o

Bienvenido real money!

f forced bail ins, the peoples of the world are not content to stand pat while their leaders sqauble over how much to confiscate from whom. Thanks to digital solutions like the Bitcoin, Spaniards and people the world over are making a run on banks from the comfort of their own homes on their smart phones. The Euro, which took two years to implement, may be largely replaced in commerce in a matter of weeks.

Even so, the Bitcoin has its limits, as wealth held digitally has a flight risk of its own. Silver and other hard currencies do not have this problem, and the first stages of the next leg up in Silver and Gold is commencing in lockstep with the Bitcoin app downloads in Iberia. Either way, it is a unanimous democratic process whose end result will be the Euro being voted off the continent.

While the monetary authorities prepare their familiar mantra, “Keep Calm and Carry on,” the response in Iberia is ringing back “I’m Latin, I can’t Keep Calm!”

Neither should you. Here at The Mint, we have taken the step of accepting Bitcoins in exchange for silver coins to deal with this contingency. We ship worldwide and guarantee your satisfaction. If you are interested, please email us at the address below for a quote as we have yet to fully automate this process.

On our two year anniversary here at Davidmint.com, we wish to take a brief moment to thank you, our fellow taxpayers, for tuning in and reading from time to time. We pray that you are well and that we can continue to be of service to you.

In honor of this occasion, we have two announcements:

1. We are giving away 100 PDF copies of our latest eBook, “What is Truth? On the Nature of Empire” for free over the next 7 days. Click here to download your copy from our new store.

Click here for your free download – Limited time offer

2. We have launched a new store right here on the site. We are taking measures towards accepting Bitcoins and, should the need arise, other forms of digital currency in exchange for our silver coin offerings.

While the first announcement is essentially shameless self promotion, the second is one that we suspect will be taken by any number of merchants in the Silver and Gold bullion space in the not too distant future.

Why? While we do not advocate holding a significant amount of long term wealth in digital formats, it may become important to do so in the short term. It may also be important to be able to transact in Bitcoins, regardless of whether or not the proceeds are held in Bitcoins or converted via an exchange to a national currency.

As the events in Cyprus continue to unfold, we here at The Mint have taken the decision to accept Bitcoins as a form of payment for Silver bullion products. While we accept that the Bitcoin, as a purely digital medium of exchange, is not without its risks, the mere prospect of a week long banking holiday, like the one the Cypriot banks are currently on, occurring closer to home demands that we create a contingency plan.

Being locked out of the bank, as the residents of Cyprus appear to be, can be downright lethal for commerce. Should the unthinkable happen in your neighborhood, it will be essential to have a backup plan.

Silver bullion is the ultimate backup plan. Should the lights go out, it is the most likely to function as a medium of exchange once the inevitable chaos wanes into some sort of order. Should the lights stay on and one’s bank accounts be randomly frozen by a government official, the ability to trade in Bitcoins will be essential for any merchant to be able to operate.

Will it work? Only time will tell. We can already foresee one possible glitch: Bitcoins have the distinct advantage of being anonymous. This is both their strength and weakness when it comes to selling bullion via mail, as in order to properly ship coins, this anonymity is likely to be temporarily relinquished into our care (silver coins are not like delivered pizzas as they must be paid for up front). While we have no immediate plans, other than to subscribe our customers to The Mint, something we see as benign, if not beneficial.

Beyond having a plan B should the banking system become “Temporarily Unavailable” on an individual or collective basis, in theory, accepting Bitcoins is beneficial as they should theoretically continue to appreciate in value against the fiat currencies of the world. The reason for this, for the uninitiated, is that Bitcoin creation is set to occur on a fixed timeline and to be ultimately finite. As of this writing, Bitcoin adoption is running well ahead of the logarithm, which is causing massive deflation in terms of Bitcoin pricing.

Mind you, Bitcoins can be traded fractionally up to 8 decimal places. Should Bitcoin adoption continue to take off, the Bitcoin’s rigid logarithm will not allow for the Bitcoin’s continued use in commerce. This has been described as its fatal flaw. The Bitcoin will, in theory, take its place in the digital realm as “Good money” in the terminology of Gresham’s Law and exit circulation. In its place will appear a plethora of digital currencies which would then come into existence via their own logarithm and trade against the Bitcoin, as today’s fiat currencies do.

In this sense, Bitcoin is the current gold standard of digital currencies. As such, our planned acceptance of Bitcoins for Silver is like trading physical silver for digital gold, as Bitcoin’s trajectory will theoretically track that of gold with one notable exception: Barring any subsequent changes to the logarithm, there will be no new “discoveries” of Bitcoins to augment the stock.

It seems like a good trade, and one we are willing to engage in to a point. However, we must reiterate that wealth must be held in the real world to be of any worldly good, and trading in Bitcoins, while temporarily solving the problem of rapidly depreciating fiat currencies, will serve to further throw the earth out of balance. For man’s activities to achieve balance with the earth, the monetary premium must be attached to something in the physical realm, not an inordinate amount of credit or data stored on a servers.

Besides, credits and data on servers has a strange knack for disappearing when you most need them. Silver typically does not.

One last word to the wise, NEVER, EVER GO SHORT BITCOINS IN FIAT CURRENCIES, as doing so places one on the wrong side of a trade against a deep pocketed adversary: A fixed mathematical limit.

With the precious metals seemingly trapped in a state of suspended animation, it is nice to come across analysis that digs into the fundamentals of the precious metals, both at the retail level as well as at the source, the miners. For a time, we have seen a steady supply of silver at around $30. The recent push under $30 has almost immediately raised the issue of supply shortages of the white metal.

Supply, of lack thereof, is the most compelling reason to hold silver. With this in mind, we were fortunate to come across this fine analysis piece by Tekoa Da Silva which we present here for your perusal and enjoyment. In this video presentation, Da Silva exhibits obvious enthusiasm for the prospects, if you will, for the gold and silver markets based on his conversations with the Perth Mint, who say all of their retail clients are holding their metals in the face of this down draft, and an adviser for the BMO group, who is again seeing a dearth of supply on the horizon as marginal mining projects are shelved.

It all adds up to a continuation of the bull market in the precious metals, as their production is inextricably linked, and demand for them at the retail level is just now increasing.

Of Money and Metals: The Operation of a Free Money Supply Explained is Volume II in the “Why what we use as Money Matters” series. Of Money and Metals presents the fallacies of the current day practice of circulating debt in the place of money and explains the urgent need for and the operation of a free money supply. This volume also explores the phenomenon of Bitcoins and digital currencies.

It is available to our dear readers for free until January 31, 2013 at smashwords.com, just enter coupon code: MA65L

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As the world carries on we offer a glimpse of what is to come. Two playful headlines that have appeared in the past two days which is essentially an advertisement that inflation has taken hold and will not soon go away:

This article confirms what metals watchers have known for some time now, that the US Mint will have to change the content of pennies and nickels, at a minimum. The Nickel inflation hedge we’ve mentioned before is about to go into effect. You can read the gory details in the US Mint’s 2012 Biennial Report to Congress on the matter.

Next, we see that, strangely it seems, demand for $100 bills has begun to pick up.

It appears that the dollar debasement is hitting main street. To keep tabs on the matter, we refer you to the M2 money supply which we present below in our Key Statistics.

The debauchery of the US currency is now hitting the street, which may mean its days are numbered. Once the moronic Fiscal Cliff and the upcoming Debt ceiling redux in March 2013 are resolved, the party will begin in earnest.

We reckon that over the next few months there will be a narrow window to get precious metals at what, in retrospect, will be a bargain price. We look for the price to rise in fits and starts from early January through March, then take off through May. Part of this is seasonal, and part of it is the debauchery related above. However, it is the debauchery which will punctuate the upcoming move.

We would like to take this opportunity to send you all a big hug and wish you and yours a Merry Christmas and a Happy Holiday Season from us here at the Mint!

As our site name implies, we have more than a passing interest in monetary theory. As such, ideas for new types of coin and currency are of special interest. When the value of the coins proposed contains an insane amount of seigniorage, we are compelled to call it out.

The Fiscal Cliff melodrama playing out in the halls of US Federal Government’s Capital has given rise to the above mentioned monetary insanity.

As the so called, moronic “Fiscal Cliff” false alarm approaches, it becomes more common for those of a Socialist/Statist leaning philosophy to search for easy solutions to what amounts to enabling catastrophic policy failures, out of control spending, and unsustainable debt pacts.

This is not surprising, as Socialism and economics are incompatible philosophies. Anyone who claims otherwise either mistakenly applies small system theory to large scale systems or is a shill. From one of these insane theorists comes the idea of the US Treasury coining a trillion dollar platinum coin to deposit at the FED, who would then cancel the Treasury’s debts.

This will not happen, first and foremost, because the insane monetary system relies on debt as its lifeblood, as such, any debt cancellation by the underlying foundation of US Treasury debt is out of the question.

Second, it must be recognized that coining a trillion dollar coin, theoretically equal to 1/60 of global GDP, that anyone other than the FED would accept at face value, is impossible, it simply flies in the face of reason. The FED has been paying 100 cents on the dollar for the MBS toilet paper that banks have sold to them for years now, as such, any concept of value left the halls of the Federal Reserve years ago.

The third reason is that the US debt at the FED has already been largely canceled via the FED’s various QE operations over the past several years. For the reasoning as to why the official US Debt held by the FED hasn’t been lowered to better reflect its true drag on GDP, we refer fellow taxpayers back to reason one.

We will present more data to back this claim in the coming week. In the meantime, if someone offers you a trillion dollar coin, be sure to check the spot price of platinum before making a more reasonable counter-offer. In any event, you are better off holding the platinum, as someday it will be worth are least a trillion Federal Reserve notes, the shills at the FED and Treasury have assured it.

Leon Bridges brought a smooth groove to his performance of “If It Feels Good (Then It Must Be)” on “The Late Late Show with James Corden” last night (March 19). Bridges served up a sweet mix of neo-soul and R & B in his upbeat performance of the track, which hails from his 2018 album […]

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Brittany Frederick

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